This paper examines the correlation between public policies in the field of military expenditures and economic growth in Romania. The research is built upon the vast literature focused on the field of public policies and economic growth. Whereas economic growth became one of the most dynamic areas in economics, this correlation will consider the determinants of the real sector development through economic phenomenon modeling. The impact of military expenditures on growth is analysed for Romania, using annual data over the period 1991-2016. The research methodology employed is the Granger causality test. The empirical results reveal that there is a bidirectional relationship between military expenditure and GDP over the long run, with a positive effect described by both relationships through several models exemplified in the analysis. From the economic point of view, these results highlight the impact of military expenditures, generating different positive effects on labor, capital, economic growth and efficient use of resources in the economic sector, at the national level.
In this paper we have investigated the impact on FDI of different factors, at quarterly and annual frequency, as reflected by economic variables (GDP, labour cost), market variables indicating country risk perception (equity markets volatility, CDS), economic sentiment and confidence indicators (computed by the European Commission) and investor perception indicators (various measures of transparency, public sector governance and accountability, political stability, law enforcement and control of corruption computed by the World Bank). Our analysis was done for ten developing European economies, using a stepwise panel regression approach and a one-lag panel VAR. Our main results confirm the effect of GDP and labour cost on Net FDI that were also identified previously. Also, we found a significant influence from CDS prices, which is aligned with previous findings on the influence of credit ratings. At the same time, our results showed a statistically significant influence on
This paper aims to establish whether there is a relationship between the main industries of the STOXX EURO 600 index. Another research question is addressed in this article: what is the link between small and large firms? In order to answer these two questions, we will use various econometric models such as VAR-impulse response functions, Granger causality tests and GARCH models for modeling the volatility. The empirical results pointed out a positive relationship between all the sectors selected and STOXX 600 index. The Granger causality test showed a unidirectional causal relationship from the insurance sector to STOXX 600 and a bidirectional causal relationship between automobiles & parts, construction and material components, retail, telecommunications, utilities and STOXX600. We strongly believe that through our results we will help investors in their decision-making process, academic research and the policy makers and will improve supervisory process.
This paper explores the sensitivity of Romanian collective investment undertakings’ returns to changes in equity, fixed income and foreign exchange market returns. We use a sample of 80 open-end investment funds and pension funds with daily returns between 2016 and 2018. Our methodology consists of measuring changes in the daily conditional volatility for the fund returns (EGARCH) and changes in their conditional correlation with selected market risk factors (DCC MV-GARCH) throughout different volatility regimes identified using a Markov Regime Switching model. We argue that, on average, the level of conditional correlations between funds and market risk factors remained stable and unconcerned by the volatility regimes. In addition, for only less than half of the funds in the sample, their volatility regimes were synchronized with those of the selected market risk factors. We found that, on average, fund returns are more correlated with equity returns and less correlated with changes in local bond yields, while not being significantly influenced by changes in foreign bond yields or changes in foreign exchange. During the period investigated equity returns were the most volatile while the funds returns volatility were, on average, much more reduced. Overall, our results show the resilience of the Romanian collective investment sector to the selected market risk factors, during the investigated period.
One of the most significant problems in economic domain is the dispose of human preference and choice forecasting. Recently, the economists have focused their researches to use the fuzzy concepts and the artificial learning procedures in the theory of economic choice. This paper extends the work done in this direction and offers a new algorithm for finding the matrix representation of the fuzzy binary relation which describes a preference relation.
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